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Awards – ‘I just have to pay more than the minimum wage – right?’ – Wrong!

19/03/2013

You are growing and you have decided to bring on your first permanent employee – you feel great but, be honest, a bit nervous? When you talk to entrepreneurs, this stage of business is what terrifies them most – being someone’s boss; responsible for pay, ER legislation and recruitment and then what happens if it isn’t working out? (There is an article on this coming but all in good time, we need to hire someone first!)

So what do you need to know……? You need to understand and comply with the relevant Modern Award for your business. Historically, there were 1,300 Awards! But with the introduction of the Fair Work Act on 1st January 2010 this number was thankfully reduced to 122. You can ring the Fair Work Ombudsman on 13 13 94 and they can help you confirm what Award your business falls under.

As an example I thought we might take a quick squiz at Professional Employees Award MA000065, which covers Information Technology employees. First thing you need to do to be compliant is to have a copy of this Award and the NES (National Employment Standards) in the office and accessible to your employees.

The Award clarifies the minimum entitlements for employees; so wages, loading and public holidays to name a few, but it also covers a legal requirement to consult with employees regarding major workplace change – this might include change in the structure of the business, technology or production that would be deemed to have a significant effect on employees. A significant effect would include aspects such as the alteration of hours of work or location, termination of employment or changes to the role or the structure of the business.

You are requirement to communicate and consult with your employees, as soon as possible, after the decision has been made. This includes documenting the changes in writing and also responding to issues raised by the employees and giving them due consideration.

Another aspect is dispute resolution – if an employee raises an issue related to this Award you must attempt to resolve it internally however, it is remains unresolved, either party can raise it with the FWA.

You are able to vary certain aspects of this particular Award, if there is mutual agreement and it meets the ‘BOOT’ (better off overall test). The aspects you might agree to vary include:

arrangements for when work is performed

overtime rates or penalty rates

allowances and leave loading

So far the ombudsman is taking a fairly relaxed approach to compliance with the relevant Award and subsequent breaches; they will generally just ensure that you move employees across, however, if you continue to breach, the full impact of legislation will hit and this includes significant fines. So, before you bring on your first employee ensure that you are compliant with your governing Award!

Next we will discuss how to ‘win the war for talent’ and interview like a pro!